What was the reported deferred revenue balance at the end of 2022 for City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| | 2024 | 2023 | 2022 | |----------------------------------------------------------------------------|------------------------------|----------------мышленный--------------|------------------------------| | Accounts receivable, beginning of year | $ 4,711,498 | $ 4,120,583 | $ 3,441,894 | | Accounts receivable, end of year | 5,389,631 | 4,711,498 | 4,120,583 | | Deferred revenue, beginning of year | 4,670,084 | 4,114,382 | 2,890,992 | | Deferred revenue, end of year | 5,173,377 | 4,670,084 | 4,114,382 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the deferred revenue balance at the end of 2022 was $4,114,382. Deferred revenue represents payments City Wide has received for services or products that have not yet been fully provided or delivered. This is a liability on City Wide's balance sheet because they have an obligation to fulfill these services or deliver these products in the future.
For a prospective City Wide franchisee, understanding the deferred revenue balance can provide insight into the company's financial stability and future obligations. A high deferred revenue balance might indicate strong future revenue streams, as it represents services or products already paid for but not yet delivered. However, it also means that City Wide has a responsibility to provide those services or products, which could impact their operational capacity and resource allocation.
Reviewing the trend of deferred revenue over several years, as presented in the table, can offer a more comprehensive understanding. For instance, the deferred revenue increased from $2,890,992 at the beginning of 2022 to $4,114,382 at the end of 2022. This increase could suggest growing sales and future service obligations. Franchisees should consider these figures in the context of City Wide's overall financial performance and growth strategy to assess the potential impact on their own franchise operations.